There is growing fear of an impending stock market crash. It's what goes from dip to diving as the euphoria headlines about the wonders of artificial intelligence begin to fade.
U.S. tech stocks have been declining in recent weeks, meaning prospects will have a flood of negative numbers that will become the norm before the month comes out.
It could be 2000 again, and like the bursting of the bubble on dot com, it could be ugly.
Federal Reserve Chairman Jerome Powell is one of the policymakers tasked with protecting wolves from the door. Speaking at the annual Jackson Hole gathering of Wyoming's central bank governors on Friday, he tried to calm his nerves.
He said the Fed was worried about rising inflation, and was willing to help the economy get tired of the uncertainty induced by Donald Trump and the slowdown in the global economy.
With STAGFLATION, there is a real prospect as the US economy slows down and inflation increases. Powell has given stock markets signs that interest rates are falling, easing pressure on debt-based companies.
The stock market has even more Powell's radar than usual, as so many US personal pensions are invested directly in listed companies. And tech stocks in particular are making huge AI investments that have yet to make a profit of $1.
A recent report from the Massachusetts Institute of Technology revealed that 95% of companies investing in generator AI have not yet seen financial gains.
The revelation comes after Sam Altman, the boss of Openai, ChatGpt owner, warned that some companies' valuations were “unusual.”
“We are pleased to announce that Ipek Ozkardeskaya, a senior analyst at currency trading company Swissquote,” said Ipek Ozkardeskaya. [Altman] The comment was a wake-up call for investors, which may have caused a sudden pullback of high-flying names. ”
Earlier in the week, stock prices of data mining and spyware companies with billions of dollars worth of US government contracts plummeted almost 10%. AI chip maker Nvidia fell more than 3%, but other AI-binding stocks like ARM, Oracle and AMD also lost ground.
Most pension funds are invested in these tech companies, along with more long-standing names like Amazon, Microsoft, Alphabet (Google), and Meta (Facebook).
Do fund managers need to withdraw? That's probably not wise.
The scale of investments in AI by Google, Meta and others is huge, and the technology potential is subject to much speculation, but white-collar workers are familiar with the expected benefits of daily hours.
The company's message, report writing, and research asking people to use AI for presentations is a daily occurrence (of course comes with a blank guarantee that job openings are not considered).
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Microsoft co-pilot and many other “helpful” AI tools are provided.
If this trend has already taken off and has many regions of the economy, there are soft landings waiting for the tech industry despite the fact that some flakier, more speculative businesses have been eliminated and failing.
If anything, the recession will help large businesses take up the wreckage and new, cheap technological breakthroughs.
Palantir's price vs. acquisition rate is 500 north. You will find that most investors are panicking over 50. Nvidia's price and return rate is 56.
The Palantir/Nvidia ratio can drop as stock prices line up along with reasonable prospects for potential revenue, but even in the most severe stock market storm, companies will not go bankrupt.
Trump is another important supporter, clearing the path for AI to infiltrate even deeper into corporate life. His support for cryptocurrencies, including himself, and deregulated social media platforms, including himself, are indications of where his sympathy is.
AI is probably going to be bad for humanity, considering that politicians and regulators are years behind the big names and technological tycoons that support AI.
But as an investor, AI will not disappear, or crash, or not crash.
